Hospital sale pushes foundations into new territory

The clock is ticking for the fundraising foundations of Haywood Regional Medical Center and Harris Regional Hospital to spend earmarked money in their coffers to benefit the hospitals.

The hospitals will soon come under the new ownership of Duke LifePoint and will no longer be able to accept charitable donations. Duke LifePoint is a for-profit health care chain, and for-profits are legally prohibited from accepting non-profit fundraising support.

Haywood Regional Medical Foundation won’t go away, however.

“We don’t want to fold up the tent. That was the board’s collective decision,” said Gavin Brown, treasurer of the foundation board and an attorney who is the Mayor of Waynesville. “There would still be plenty of opportunities to provide for the healthcare needs of this community.”

The Haywood hospital foundation will retool its mission and continue its charitable work in the health care arena, even though it will no longer be a fundraising arm for the hospital itself.

“We truly feel like our work is important and of great value and there is tremendous need to continue to support improving the health of the community,” said Laura Leatherwood, chair of the foundation board and a vice president at Haywood Community College.

The WestCare hospital foundation, which supports Harris Regional and Swain County Medical Center, will also continue in some role as a community foundation focused on health care initiatives.

With the sale of the hospitals imminent, the respective foundations are acting fast to finish any projects that were in the pipeline before the ownership change happens.

Haywood Regional Medical Center is knocking out renovations to the fourth floor of the hospital, a project that the foundation had already set aside $400,000 for before the sale to Duke LifePoint was announced.

At Harris Regional, $600,000 had been raised over the past couple of years for a major overhaul of the labor and delivery suites and the mother-baby floor. The New Generations Birthing Center was envisioned as a $3 million project. The foundation is hammering out the first phase now, and Duke LifePoint has pledged to complete the rest of the project when it assumes ownership of the hospital.

But the foundations aren’t spending down every penny they have — only the donations that had come in earmarked for a particular hospital-related project are under the gun to be used as intended before the sale goes through, explained Steve Brown, a staff director shared by both foundations.

Any general funds will follow the foundations as they move toward a new identity as a health care community funds. But Brown said the foundations are working with as many of their donors as possible to determine what their wishes would be as the foundations embark on a new mission that is no longer tied to the hospitals.

Is one better than two?

The Haywood hospital foundation board is currently analyzing exactly what its new structure and charter should be. The process could take several months, according to Leatherwood.

“We are going to evaluate all of our options before we make a decision,” Leatherwood said.

The most likely scenario is a community-based non-profit that takes on health care causes and initiatives.

“This is an opportunity for us to reach out countywide and do some collaborative work in regard to improving the health of the community,” Leatherwood said.

The hospital foundation isn’t the only one working on the idea of a community health care non-profit in Haywood County.

Haywood County itself stands to clear several million dollars from the sale of the hospital to Duke LifePoint.

County commissioners have signaled they will put that money into a trust fund of some sort for community health care initiatives — tapping only the interest it earns.

“We do not want the money to be squandered,” said County Commissioner Mark Swanger. “We want to protect the principal so it would continue to generate revenue over time, so we can address health issues in Haywood County that heretofore there have been no funds to address.”

With the county and the hospital foundation both hoping to create a community health care funding pool, the two have broached the idea of joining forces.

Swanger said the foundation’s fundraising success would make it a valuable partner.

“They have an impressive donor list. It would be to the advantage of any newly created foundation to have them as partners so we could maximize the potential benefit to our county,” Swanger said.

While it might seem logical to created a single health care non-profit and pool their assets into a single trust fund, there would be plenty of details to work out, like how the board for the new foundation would be appointed.

And both would want assurances the funds they bring to the table are kept in a lockbox for the intended purpose.

“You want something that is held in perpetuity for the health needs of Haywood County. You don’t want to see that fund raided,” Gavin Brown said.

The foundation has assets of $1 million. Meanwhile, the county should net at least $8 million, maybe more, from the sale of the hospital. While the actual price tag is $26 million, the county only gets what’s left over after paying off all the outstanding debt, loans and bills.

Meanwhile, Haywood Regional Medical Center — not the foundation, but the non-profit entity that manages and oversees the hospital — would presumably cease to function once it sells the hospital to Duke LifePoint, since its purpose was running a hospital and it will no longer have a hospital to run.

Haywood Regional Medical Center Foundation has been a fundraising powerhouse for the hospital. It has raised $13 million since 1991.

“The community has been extremely generous. Because of their philanthropic nature, we have been able to do some really great things to improve health care,” Leatherwood said.

It’s most successful fundraising campaigns have centered around big-ticket capital projects: the construction of the fitness center, a new emergency department, an in-patient hospice house, and renovations for the mother-baby labor and delivery floor.

But the foundation has also funded equipment, from heart monitors to security officer radios to a new nurse call system for patient rooms. And it has also supported medical services, like mammograms for underserved women or nurse education.

Still, it was always the major construction and renovation projects that inspired hospital benefactors to open their wallets, it remains to be seen whether the foundation can rally that kind of support from donors for other types of projects under a new charter.

“The question is can we transfer the philanthropy to a new mission,” Gavin Brown said.

WestCare’s next step

The WestCare Foundation isn’t technically a stand-alone foundation. The fundraising arm is part and parcel of WestCare itself, kind of like a committee or department within the hospital.

Funds raised by the WestCare foundation are kept and held by the hospital, unlike Haywood where an independent foundation holds its own funds and make grants to the hospital for specific projects or needs.

But WestCare follows the wishes of a foundation committee on how the money it has raised should be spent, and donors will still stipulate what projects they want their contribution to go toward, Steve Brown said.

WestCare spokeperson Lucretia Stargill said the foundation will be spun off from the hospital, and would become a new entity of some sort whose mission is no longer tied to supporting the hospital.

The bigger question is what will happen to WestCare itself once it sells the hospital to Duke LifePoint. Stargill declined to answer any questions related to that.

Hospital officials have declined to talk about what will happen to the money they get from the sale (it will not go to the county like in Haywood), whether WestCare would continue to exist, whether it would become obsolete, or whether WestCare would retain some sort of ownership stake of the hospital under Duke LifePoint.